February 7, 2017 at 5:02 pm #3240Rana GoodmanKeymaster
I have been asked to post this communication between management and resident, Nelson Orth regarding the construction defect lawsuit. Nelson has filed for a Intervention with the Real Estate Division (the governing body over HOAs) since their Ombudsman is of the opinion that the decision to move forward with the lawsuit was not what is stated in our CC&Rs. The division will decide who is right it seems.
From: Lori Martin
To: Nelson Orth
Subject: Response to email – Nelson Orth
First I want to acknowledge receipt of your letter dated January 24, 2017 and ask if you would like your alleged violation of the governing documents and NRS 116 to be on the next Agenda. I sent you a letter in the mail as well asking about same and whether you would like to be on the Agenda.
I also want to mention that SCA’s CC&Rs 16.2 indicates that the vote of 75% of the unit owners does not apply to: (c) actions to protect the health, safety and welfare of the Members.
16.2. Consensus for Association Litigation.
Except as provided in this Section, the Association or a Neighborhood Association shall not commence a judicial or administrative proceeding without first providing at least 21 days written notice of a meeting to consider such proposed action to its Members. Taking such action shall require the vote of Owners of 75% of the total number of Lots in the Association or in the Neighborhood Association, as appropriate. This Section shall not apply, however, to (a) actions brought by the Association to enforce the Governing Documents (including, without limitation, the collection of assessments and the foreclosure of liens); (b) counterclaims brought by the Association in proceedings instituted against it; or (c) actions to protect the health, safety, and welfare of the Members. This Section shall not be amended unless such amendment is approved by the percentage of votes, and pursuant to the same procedures, necessary to institute proceedings as provided above.
The Construction Defect action was taken in order to protect the health, safety and welfare of the Members due to the poor construction of the Liberty Center, the mold found to be through the facility and a host of other items discovered by the engineers and architect(s).
Additionally, Mr. Leach weighed in on your alleged violation and contact with the Ombudsman, Mrs. Jackson. We cannot imagine that Mrs. Jackson gave you legal advice. NRS 116.31088 (1) states just the opposite – that the state statute trumps the CC&Rs (see highlighted section below). If the CC&Rs did trump the state statute, wording such as “Unless the declaration provides otherwise…..” would have been included.
However, as I mentioned above, if the CC&Rs were the prevailing document in this situation, the Declaration indicates that the section does not apply to actions to protect the health, safety and welfare of the Members.
NRS 116.31088 Meetings regarding civil actions; requirements for commencing or ratifying certain civil actions; right of units’ owners to request dismissal of certain civil actions; disclosure of terms and conditions of settlements.
1. The association shall provide written notice to each unit’s owner of a meeting at which the commencement of a civil action is to be considered at least 21 calendar days before the date of the meeting. Except as otherwise provided in this subsection, the association may commence a civil action only upon a vote or written agreement of the owners of units to which at least a majority of the votes of the members of the association are allocated. The provisions of this subsection do not apply to a civil action that is commenced:
(a) To enforce the payment of an assessment;
(b) To enforce the declaration, bylaws or rules of the association;
(c) To enforce a contract with a vendor;
(d) To proceed with a counterclaim; or
(e) To protect the health, safety and welfare of the members of the association. If a civil action is commenced pursuant to this paragraph without the required vote or agreement, the action must be ratified within 90 days after the commencement of the action by a vote or written agreement of the owners of the units to which at least a majority of votes of the members of the association are allocated. If the association, after making a good faith effort, cannot obtain the required vote or agreement to commence or ratify such a civil action, the association may thereafter seek to dismiss the action without prejudice for that reason only if a vote or written agreement of the owners of the units to which at least a majority of votes of the members of the association are allocated was obtained at the time the approval to commence or ratify the action was sought.
From: Nelson Orth
Subject: Liberty Center CD Lawsuit
Members of the Board:
On Friday January 27, I attended the monthly Q&A session at the Nevada Real Estate Division. At this meeting I asked the Ombudsman which set of requirements took precedent – NRS 116 which requires 50% of the vote to proceed to litigation or those of our CC&Rs which requires 75% of homeowner vote. Very quickly and very decisively Ms. Jackson answered – the CC&Rs. I was somewhat stunned by this answer so I repeated the question. Again the answer was a definitive CC&Rs.
It is rather astonishing that none of our lawyers, management, or any member of the board knew this information. Today I will be asking for a copy of our lawyer’s written opinion on this subject, but I am certain that I will be denied this information due to client/attorney privilege. I could be wrong, but it is my opinion that no such written opinion exists. Our lawyer tells you what you want to hear. Have you ever considered that our general counsel is not as smart as you believe? How many hours of work, how much energy, and how many dollars could have been saved if one of you had just made one phone call to NRED. But it is your belief in your superior knowledge, your total disrespect for the law, and belief in the stupidity of homeowners that drives the policy of this association.
As you know I have already started the IA process. You acknowledged this on January 24. Hence you have 21 days from that date to cancel the litigation process. If you do not, I will then proceed by submitting the formal IA to NRED.
On Monday, February 6, 2017
Members of the Board:
First I would like to respond to the Community Manager’s response to my email of January 30. The specific question of whether language such as “Unless the declaration provides otherwise…” is required or not required in NRS 116.31088 in order for the governing documents to be controlling needs to be answered. The answer is NO. The governing documents are controlling over NRS 116.31088. The Community Manager raises other issues, but they are all mute since there is no question that the CC&Rs take precedent over NRS 116.
Second, what do I care what John Leach thinks. If he doubts the veracity of what I reported or what Ms. Jackson said, why doesn’t he call Ms. Jackson, and ask her what she said. Or why doesn’t anyone of you take 10 minutes and call? Or why doesn’t someone from management call, and discover the truth instead of insinuating that I am either lying or do not know what I am talking about.
Third, your argument is not with me or Ms. Jackson. Your argument is with Michelle Briggs, the Attorney General of the State of Nevada representative to NRED, and considered the most authoritative and knowledgable person in the state on NRS 116. She is the person who affirmed the words Sharon Jackson provided to me. If you are so sure that I am wrong and John Leach is correct, then I challenge you to call or meet with Ms. Briggs, and explain your version of the law to her.
Moving on – as you continue to argue with me, the dollar count continues to mount. I know that the mailing cost for one mailing to homeowners is around $2600, and homeowners have received two letters on this subject. Does this include the cost of envelopes and other associated materials? We do know it does not include the many, many hours that have been, and still continue to accumulate. Only you (maybe) know how many hours have been devoted by staff, lawyers, and others in pursuit of achieving the right to litigate. This spending is the height of hypocrisy. You have raised our assessments by 10% for 2017 with the possibility of another 10% for 2018. Yet you continue to spend our money like there is a never ending supply.
It is my opinion that you are trying to sue Del Webb/Pulte in order to cover up the inappropriate actions and behavior of past boards. And you need a scapegoat. If you were going to sue, why not sue FSR? They were responsible, under the oversight of the board, for the maintenance, repair, and upkeep of Liberty Center. Did they perform a quarterly or semi-annual inspection of Liberty Center? Do you have those reports from the past seven years?. Or does the prospect of having to explain why no independent audit of the payroll exists, or why SCA overpaid RMI/FSR $2.9M during the years 2009 through 2013 bother you.
You have 8 days left before the Intervention Affidavit (IA) is mailed.
Nelson, this responds to your note to the Board:
- The Association employs both Ms. Seddon and Ms. Martin, because in part they are accredited community managers. As such they have the background through training and experience to respond to member inquiries along the lines of your note. To my knowledge, no one on the Board possesses the same credentials. Thus, the Board defers to staff on such replies.
- I’ll assume the rest of your editorial comment is rhetorical; if not, I doubt the Board would consider any comment as adding to the discussion.
- It’s unclear what your concluding remark means. It may be mathematically correct, but a bit confusing as to what the alternative is.
As always, we appreciate your attempt to avoid an escalation of matters; however, experience has shown that is not always possible.
President, SCA Board
I am not challenging the credentials of Ms. Seddon or Ms. Martin. I am challenging their interpretation of NRS 116 and our CC&Rs. When confronting an issue like this, have you ever considered that a homeowner may be correct, and staff may be wrong? This is one of the reasons why there is such discourse between homeowners and the board. I have given you a path to discover the truth, and you refuse to take a step in that direction. All I have asked is that you call or meet with Sharon Jackson or Michelle Briggs, and verify (or not) that I am informing you of the truth. Or do you have such disrespect for homeowners and blinding faith in management, that it is impossible for any other person or group to have some insight to the truth. In my opinion, if you have this blind faith in the opinions of staff and our legal counsel, then that is a serious flaw in your responsibilities as president of this association.
The solution is simple and straight forward – verify with NRED if I am telling you the truth or not. If I am correct, then you can simply cancel the lawsuit against Del Webb/Pulte, and the problem is solved. But I suspect you do not want to know the truth.
Subject: Re: Liberty Center CD Lawsuit
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